Exhibit 10.5
McMoRan EXPLORATION CO.
2000 STOCK INCENTIVE PLAN
I SECTION
Purpose. The purpose of the McMoRan Exploration Co. 2000
Stock Incentive Plan (the "Plan") is to motivate and reward key
employees, consultants and advisers by giving them a proprietary
interest in the Company's continued and future success.
II SECTION
Definitions. As used in the Plan, the following terms shall
have the meanings set forth below:
"Award" shall mean any Option, Stock Appreciation Right,
Limited Right, Restricted Stock or Other Stock-Based Award.
"Award Agreement" shall mean any notice of grant, written
agreement, contract or other instrument or document evidencing
any Award, which may, but need not, be executed or acknowledged
by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean, until otherwise determined by the
Board, the Corporate Personnel Committee of the Board.
"Company" shall mean McMoRan Exploration Co.
"Designated Beneficiary" shall mean the beneficiary
designated by the Participant, in a manner determined by the
Committee, to receive the benefits due the Participant under the
Plan in the event of the Participant's death. In the absence of
an effective designation by the Participant, Designated
Beneficiary shall mean the Participant's estate.
"Eligible Individual" shall mean (i) any person providing
services as an officer of the Company or a Subsidiary, whether or
not employed by such entity, including any such person who is
also a director of the Company, (ii) any employee of the Company
or a Subsidiary, including any director who is also an employee
of the Company or a Subsidiary, (iii) any officer or employee of
an entity with which the Company has contracted to receive
executive, management or legal services who provides services to
the Company or a Subsidiary through such arrangement, (iv) any
consultant or adviser to the Company, a Subsidiary or to an
entity described in clause (iii) hereof who provides services to
the Company or a Subsidiary through such arrangement and (v) any
person who has agreed in writing to become a person described in
clauses (i), (ii), (iii) or (iv) within not more than 30 days
following the date of grant of such person's first Award under
the Plan.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Incentive Stock Option" shall mean an option granted under
Section 6 of the Plan that is intended to meet the requirements
of Section 422 of the Code or any successor provision thereto.
"Limited Right" shall mean any right granted under Section 8
of the Plan.
"Nonqualified Stock Option" shall mean an option granted
under Section 6 of the Plan that is not intended to be an
Incentive Stock Option.
"Offer" shall mean any tender offer, exchange offer or
series of purchases or other acquisitions, or any combination of
those transactions, as a result of which any person, or any two
or more persons acting as a group, and all affiliates of such
person or persons, shall beneficially own more than 40% of all
classes and series of the Company's stock outstanding, taken as a
whole, that has voting rights with respect to the election of
directors of the Company (not including any series of preferred
stock of the Company that has the right to elect directors only
upon the failure of the Company to pay dividends).
"Offer Price" shall mean the highest price per Share paid in
any Offer that is in effect at any time during the period
beginning on the ninetieth day prior to the date on which a
Limited Right is exercised and ending on and including the date
of exercise of such Limited Right. Any securities or property
that comprise all or a portion of the consideration paid for
Shares in the Offer shall be valued in determining the Offer
Price at the higher of (i) the valuation placed on such
securities or property by the person or persons making such
Offer, or (ii) the valuation, if any, placed on such securities
or property by the Committee or the Board.
"Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.
"Other Stock-Based Award" shall mean any right or award
granted under Section 10 of the Plan.
"Participant" shall mean any Eligible Individual granted an
Award under the Plan.
"Person" shall mean any individual, corporation,
partnership, limited liability company, association, joint-stock
company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Restricted Stock" shall mean any restricted stock granted
under Section 9 of the Plan.
"Section 162(m)" shall mean Section 162(m) of the Code and
all regulations promulgated thereunder as in effect from time to
time.
"Shares" shall mean the shares of Common Stock, par value
$0.01 per share, of the Company and such other securities of the
Company or a Subsidiary as the Committee may from time to time
designate.
"Stock Appreciation Right" shall mean any right granted
under Section 7 of the Plan.
"Subsidiary" shall mean (i) any corporation or other entity
in which the Company possesses directly or indirectly equity
interests representing at least 50% of the total ordinary voting
power or at least 50% of the total value of all classes of equity
interests of such corporation or other entity and (ii) any other
entity in which the Company has a direct or indirect economic
interest that is designated as a Subsidiary by the Committee.
III SECTION
Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to an
Eligible Individual; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights or other
matters are to be calculated in connection with, Awards; (iv)
determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, whole Shares, other whole
securities, other Awards, other property or other cash amounts
payable by the Company upon the exercise of that or other Awards,
or canceled, forfeited or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or
suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable by the Company with respect
to an Award shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii)
interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (viii) establish,
amend, suspend or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination
and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive
and binding upon all Persons, including the Company, any
Subsidiary, any Participant, any holder or beneficiary of any
Award, any stockholder of the Company and any Eligible
Individual.
Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more
officers of the Company the authority, subject to such terms and
limitations as the Committee shall determine, to grant and set
the terms of Awards, to cancel, modify or waive rights with
respect to, or to alter, discontinue, suspend, or terminate
Awards held by, Eligible Individuals who are not officers or
directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto, or who are
otherwise not subject to such Section.
IV. SECTION
Eligibility. Any Eligible Individual shall be eligible to
be granted an Award.
V. SECTION
Shares Available for Awards. Subject to adjustment as
provided in Section 5(b):
(i) Calculation of Number of Shares Available.
a) Subject to the other provisions of this
Section 5(a), the number of Shares with respect to which Awards
payable in Shares may be granted under the Plan shall be 600,000.
Awards that by their terms may be settled only in cash shall not
be counted against the maximum number of Shares provided herein.
The number of Shares that may be issued
pursuant to Incentive Stock Options may not exceed 400,000
Shares.
Subject to the other provisions of this
Section 5(a), the maximum number of Shares with respect to which
Awards in the form of Restricted Stock or Other Stock-Based
Awards payable in Shares for which a per share purchase price
that is less than 100% of the fair market value of the securities
to which the Award relates shall be 400,000 Shares.
To the extent any Shares covered by an Award
are not issued because the Award is forfeited or canceled or the
Award is settled in cash, such Shares shall again be available
for grant pursuant to new Awards under the Plan.
In the event that Shares are issued as
Restricted Stock or Other Stock-Based Awards under the Plan and
thereafter are forfeited or reacquired by the Company pursuant to
rights reserved upon issuance thereof, such Shares shall again be
available for grant pursuant to new Awards under the Plan.
If the exercise price of any Option is
satisfied by tendering Shares to the Company, only the number of
Shares issued net of the Shares tendered shall be deemed issued
for purposes of determining the maximum number of Shares
available for issuance under Section 5(a)(i)(A). However, all of
the Shares issued upon exercise shall be deemed issued for
purposes of determining the maximum number of Shares that may be
issued pursuant to Incentive Stock Options.
(ii) Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist of authorized and
unissued Shares or of treasury Shares, including Shares held by
the Company or a Subsidiary and Shares acquired in the open
market or otherwise obtained by the Company or a Subsidiary. The
issuance of Shares may be effected on a non-certificated basis,
to the extent not prohibited by applicable law or the applicable
rules of any stock exchange.
(iii) Individual Limit. Any provision of the Plan
to the contrary notwithstanding, no individual may receive in any
year Awards under the Plan, whether payable in cash or Shares,
that relate to more than 250,000 Shares.
(iv) Use of Shares. Subject to the terms of the Plan
and the overall limitation on the number of Shares that may be
delivered under the Plan, the Committee may use available Shares
as the form of payment for compensation, grants or rights earned
or due under any other compensation plans or arrangements of the
Company or a Subsidiary and the plans or arrangements of the
Company or a Subsidiary assumed in business combinations.
Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in
the form of cash, Shares, Subsidiary securities, other securities
or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the
Committee may, in its sole discretion and in such manner as it
may deem equitable, adjust any or all of (i) the number and type
of Shares (or other securities or property) with respect to which
Awards may be granted, (ii) the number and type of Shares (or
other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award and,
if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award and, if deemed appropriate, adjust
outstanding Awards to provide the rights contemplated by Section
11(b) hereof; provided, in each case, that with respect to Awards
of Incentive Stock Options no such adjustment shall be authorized
to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code or any successor provision thereto
and, with respect to all Awards under the Plan, no such
adjustment shall be authorized to the extent that such authority
would be inconsistent with the requirements for full
deductibility under Section 162(m); and provided further, that
the number of Shares subject to any Award denominated in Shares
shall always be a whole number.
VI. SECTION
A. Stock Options. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to
determine the Eligible Individuals to whom Options shall be
granted, the number of Shares to be covered by each Option, the
option price thereof, the conditions and limitations applicable
to the exercise of the Option and the other terms thereof. The
Committee shall have the authority to grant Incentive Stock
Options, Nonqualified Stock Options or both and the other terms
thereof. In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with
such rules as may be required by Section 422 of the Code, as from
time to time amended, and any implementing regulations. Except
in the case of an Option granted in assumption of or substitution
for an outstanding award of a company acquired by the Company or
with which the Company combines, the exercise price of any Option
granted under this Plan shall not be less than 100% of the fair
market value of the underlying Shares on the date of grant.
Exercise. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Committee
may, in its sole discretion, specify in the applicable Award
Agreement or thereafter, provided, however, that in no event may
any Option granted hereunder be exercisable after the expiration
of 10 years after the date of such grant. The Committee may
impose such conditions with respect to the exercise of Options,
including without limitation, any condition relating to the
application of Federal or state securities laws, as it may deem
necessary or advisable. An Option may be exercised, in whole or
in part, by giving written notice to the Company, specifying the
number of Shares to be purchased. The exercise notice shall be
accompanied by the full purchase price for the Shares.
Payment. The Option price shall be payable in United
States dollars and may be paid by (i) cash; (ii) check; (iii)
delivery of shares of Common Stock, which shares shall be valued
for this purpose at the Fair Market Value on the business day
immediately preceding the date such Option is exercised and,
unless otherwise determined by the Committee, shall have been
held by the optionee for at least six months; (iv) if permitted
by the Committee, delivery (including by facsimile) of a properly
executed exercise notice together with irrevocable instructions
to a broker approved by the Company (with a copy to the Company)
to sell a sufficient number of Shares and to deliver promptly to
the Company the amount of sale proceeds to pay the exercise
price; or (v) in such other manner as may be authorized from time
to time by the Committee. In the case of delivery of an
uncertified check upon exercise of an Option, no Shares shall be
issued until the check has been paid in full. If the Committee
permits cashless exercises through a broker, as described in (iv)
above, the par value of such shares shall be deemed paid in
services previously provided to the Company by the Participant.
Prior to the issuance of Shares upon the exercise of an Option, a
Participant shall have no rights as a shareholder.
VII. SECTION
Stock Appreciation Rights. Subject to the provisions
of the Plan, the Committee shall have sole and complete authority
to determine the Eligible Individuals to whom Stock Appreciation
Rights shall be granted, the number of Shares to be covered by
each Award of Stock Appreciation Rights, the grant price thereof,
the conditions and limitations applicable to the exercise of the
Stock Appreciation Right and the other terms thereof. Stock
Appreciation Rights may be granted in tandem with another Award,
in addition to another Award, or freestanding and unrelated to
any other Award. Stock Appreciation Rights granted in tandem
with or in addition to an Option or other Award may be granted
either at the same time as the Option or other Award or at a
later time. Stock Appreciation Rights shall not be exercisable
after the expiration of 10 years after the date of grant. Except
in the case of a Stock Appreciation Right granted in assumption
of or substitution for an outstanding award of a company acquired
by the Company or with which the Company combines, the grant
price of any Stock Appreciation Right granted under this Plan
shall not be less than 100% of the fair market value of the
Shares covered by such Stock Appreciation Right on the date of
grant or, in the case of a Stock Appreciation Right granted in
tandem with a then outstanding Option or other Award, on the date
of grant of such related Option or Award.
A Stock Appreciation Right shall entitle the holder
thereof to receive upon exercise, for each Share to which the
Stock Appreciation Right relates, an amount equal to the excess,
if any, of the fair market value of a Share on the date of
exercise of the Stock Appreciation Right over the grant price.
Any Stock Appreciation Right shall be settled in cash, unless the
Committee shall determine at the time of grant of a Stock
Appreciation Right that it shall or may be settled in cash,
Shares or a combination of cash and Shares.
VIII. SECTION
A. Limited Rights. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to
determine the Eligible Individuals to whom Limited Rights shall
be granted, the number of Shares to be covered by each Award of
Limited Rights, the grant price thereof, the conditions and
limitations applicable to the exercise of the Limited Rights and
the other terms thereof. Limited Rights may be granted in tandem
with another Award, in addition to another Award, or freestanding
and unrelated to any Award. Limited Rights granted in tandem
with or in addition to an Award may be granted either at the same
time as the Award or at a later time. Limited Rights shall not
be exercisable after the expiration of 10 years after the date of
grant and shall only be exercisable during a period determined at
the time of grant by the Committee beginning not earlier than one
day and ending not more than ninety days after the expiration
date of an Offer. Except in the case of a Limited Right granted
in assumption of or substitution for an outstanding award of a
company acquired by the Company or with which the Company
combines, the grant price of any Limited Right granted under this
Plan shall not be less than 100% of the fair market value of the
Shares covered by such Limited Right on the date of grant or, in
the case of a Limited Right granted in tandem with a then
outstanding Option or other Award, on the date of grant of such
related Option or Award.
A Limited Right shall entitle the holder thereof to
receive upon exercise, for each Share to which the Limited Right
relates, an amount equal to the excess, if any, of the Offer
Price on the date of exercise of the Limited Right over the grant
price. Any Limited Right shall be settled in cash, unless the
Committee shall determine at the time of grant of a Limited Right
that it shall or may be settled in cash, Shares or a combination
of cash and Shares.
IX. SECTION
A. Grant of Restricted Stock. Subject to the
provisions of the Plan, the Committee shall have sole and
complete authority to determine the Eligible Individuals to whom
Restricted Stock shall be granted, the number of Shares to be
covered by each Award of Restricted Stock and the terms,
conditions, and limitations applicable thereto. The Committee
shall also have authority to grant restricted stock units.
Restricted stock units shall be subject to the requirements
applicable to Other Stock-Based Awards under Section 10. An
Award of Restricted Stock may be subject to the attainment of
specified performance goals or targets, restrictions on transfer,
forfeitability provisions and such other terms and conditions as
the Committee may determine, subject to the provisions of the
Plan. An award of Restricted Stock may be made in lieu of the
payment of cash compensation otherwise due to an Eligible
Individual. To the extent that Restricted Stock is intended to
qualify as "performance- based compensation" under Section
162(m), it must meet the additional requirements imposed thereby.
The Restricted Period. At the time that an Award of
Restricted Stock is made, the Committee shall establish a period
of time during which the transfer of the Shares of Restricted
Stock shall be restricted (the "Restricted Period"). Each Award
of Restricted Stock may have a different Restricted Period. A
Restricted Period of at least three years is required, except
that if the grant or vesting of the Shares is subject to the
attainment of specified performance goals, a Restricted Period of
one year or more is permitted. The expiration of the Restricted
Period shall also occur as provided under Section 12(a) hereof.
Escrow. The Participant receiving Restricted Stock
shall enter into an Award Agreement with the Company setting
forth the conditions of the grant. Certificates representing
Shares of Restricted Stock shall be registered in the name of the
Participant and deposited with the Company, together with a stock
power endorsed in blank by the Participant. Each such
certificate shall bear a legend in substantially the following
form:
The transferability of this certificate and the
shares of Common Stock represented by it are
subject to the terms and conditions (including
conditions of forfeiture) contained in the McMoRan
Exploration Co. 2000 Stock Incentive Plan (the
"Plan") and a notice of grant issued thereunder to
the registered owner by McMoRan Exploration Co.
Copies of the Plan and the notice of grant are on
file at the principal office of McMoRan
Exploration Co.
Dividends on Restricted Stock. Any and all cash and
stock dividends paid with respect to the Shares of Restricted
Stock shall be subject to any restrictions on transfer,
forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Award
Agreement.
Forfeiture. In the event of the forfeiture of any
Shares of Restricted Stock under the terms provided in the Award
Agreement (including any additional Shares of Restricted Stock
that may result from the reinvestment of cash and stock
dividends, if so provided in the Award Agreement), such forfeited
shares shall be surrendered and the certificates canceled. The
Participants shall have the same rights and privileges, and be
subject to the same forfeiture provisions, with respect to any
additional Shares received pursuant to Section 5(b) or Section
11(b) due to a recapitalization, merger or other change in
capitalization.
Expiration of Restricted Period. Upon the expiration
or termination of the Restricted Period and the satisfaction of
any other conditions prescribed by the Committee or at such
earlier time as provided for in Section 9(b) and in the Award
Agreement or an amendment thereto, the restrictions applicable to
the Restricted Stock shall lapse and a stock certificate for the
number of Shares of Restricted Stock with respect to which the
restrictions have lapsed shall be delivered, free of all such
restrictions and legends, except any that may be imposed by law,
to the Participant or the Participant's estate, as the case may
be.
Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends that may be imposed in the Award Agreement,
each Participant receiving Restricted Stock shall have all the
rights of a shareholder with respect to Shares of stock during
any period in which such Shares are subject to forfeiture and
restrictions on transfer, including without limitation, the right
to vote such Shares.
Performance-Based Restricted Stock under Section
162(m). The Committee shall determine at the time of grant if a
grant of Restricted Stock is intended to qualify as "performance-
based compensation" as that term is used in Section 162(m). Any
such grant shall be conditioned on the achievement of one or more
performance measures. The performance measures pursuant to which
the Restricted Stock shall vest shall be any or a combination of
the following: earnings per share, return on assets, an economic
value added measure, shareholder return, earnings, share price,
return on equity, return on investment, return on fully-employed
capital, reduction of expenses, containment of expenses within
budget, reserve recognition, addition to reserves, cash provided
by operating activities, increase in cash flow, cash flow per
equivalent barrel, finding costs per equivalent barrel, or
increase in production, of the Company, a division of the Company
or a Subsidiary. For any performance period, such performance
objectives may be measured on an absolute basis or relative to a
group of peer companies selected by the Committee, relative to
internal goals or relative to levels attained in prior years.
For grants of Restricted Stock intended to qualify as
"performance-based compensation," the grants of Restricted Stock
and the establishment of performance measures shall be made
during the period required under Section 162(m).
X SECTION
Other Stock-Based Awards. The Committee is hereby
authorized to grant to Eligible Individuals an "Other Stock-Based
Award", which shall consist of an Award, the value of which is
based in whole or in part on the value of Shares, that is not an
instrument or Award specified in Sections 6 through 9 of this
Plan. Other Stock-Based Awards may be awards of Shares or may be
denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares
(including, without limitation, restricted stock units or
securities convertible or exchangeable into or exercisable for
Shares), as deemed by the Committee consistent with the purposes
of the Plan. The Committee shall determine the terms and
conditions of any such Other Stock-Based Award and may provide
that such awards would be payable in whole or in part in cash.
To the extent that an Other Stock-Based Award is intended to
qualify as "performance-based compensation" under Section 162(m),
it must be made subject to the attainment of one or more of the
performance goals specified in Section 10(b) hereof and meet the
additional requirements imposed by Section 162(m).
Performance-Based Other Stock-Based Awards under
Section 162(m). The Committee shall determine at the time of
grant if the grant of an Other Stock-Based Award is intended to
qualify as "performance-based compensation" as that term is used
in Section 162(m). Any such grant shall be conditioned on the
achievement of one or more performance measures. The performance
measures pursuant to which the Other Stock-Based Award shall vest
shall be any or a combination of the following: earnings per
share, return on assets, an economic value added measure,
shareholder return, earnings, share price, return on equity,
return on investment, return on fully-employed capital, reduction
of expenses, containment of expenses within budget, reserve
recognition, addition to reserves, cash provided by operating
activities, increase in cash flow, cash flow per equivalent
barrel, finding costs per equivalent barrel, or increase in
production of the Company, a division of the Company or a
Subsidiary. For any performance period, such performance
objectives may be measured on an absolute basis or relative to a
group of peer companies selected by the Committee, relative to
internal goals or relative to levels attained in prior years.
For grants of Other Stock-Based Awards intended to qualify as
"performance-based compensation," the grants of Other Stock-Based
Awards and the establishment of performance measures shall be
made during the period required under Section 162(m).
Dividend Equivalents. In the sole and complete
discretion of the Committee, an Award, whether made as an Other
Stock-Based Award under this Section 10 or as an Award granted
pursuant to Sections 6 through 9 hereof, may provide the holder
thereof with dividends or dividend equivalents, payable in cash,
Shares, Subsidiary securities, other securities or other property
on a current or deferred basis.
XI. SECTION
A. Amendment or Discontinuance of the Plan. The
Board may amend or discontinue the Plan at any time; provided,
however, that no such amendment may
(i) without the approval of the stockholders, (i)
increase, subject to adjustments permitted herein, the
maximum number of shares of Common Stock that may be
issued through the Plan, (ii) materially increase the
benefits accruing to participants under the Plan (iii)
materially expand the classes of persons eligible to
participate in the Plan, or (iv) amend Section 11(c) to
permit repricing of options; or
(ii) materially impair, without the consent of the
recipient, an Award previously granted.
B. Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The Committee is hereby
authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events
described in Section 5(b) hereof) affecting the Company, or the
financial statements of the Company or any Subsidiary, or of
changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such
adjustments are appropriate to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available
under the Plan.
Cancellation. Any provision of this Plan or any Award
Agreement to the contrary notwithstanding, the Committee may
cause any Award granted hereunder to be canceled in consideration
of a cash payment or alternative Award made to the holder of such
canceled Award equal in value to such canceled Award.
Notwithstanding the foregoing, no options granted under the Plan
shall be repriced without the approval of the stockholders of the
Company. The determinations of value under this subparagraph
shall be made by the Committee in its sole discretion.
XII. SECTION
A. Award Agreements. Each Award hereunder shall be
evidenced by an agreement or notice delivered to the Participant
(by paper copy or electronically) that shall specify the terms
and conditions thereof and any rules applicable thereto,
including but not limited to the effect on such Award of the
death, retirement or other termination of employment or cessation
of consulting or advisory services of the Participant and the
effect thereon, if any, of a change in control of the Company.
B. Withholding. (i) A Participant may be required to
pay to the Company, and the Company shall have the right to
deduct from all amounts paid to a Participant (whether under the
Plan or otherwise), any taxes required by law to be paid or
withheld in respect of Awards hereunder to such Participant. The
Committee may provide for additional cash payments to holders of
Awards to defray or offset any tax arising from the grant,
vesting, exercise or payment of any Award.
(ii) At any time that a Participant is required to pay
to the Company an amount required to be withheld under the
applicable tax laws in connection with the issuance of shares of
Common Stock under the Plan, the Participant may, if permitted by
the Committee, satisfy this obligation in whole or in part by
electing (the "Election") to have the Company withhold from the
issuance shares of Common Stock having a value equal to the
amount required to be withheld. The value of the shares withheld
shall be based on the fair market value of the Common Stock on
the date that the amount of tax to be withheld shall be
determined in accordance with applicable tax laws (the "Tax
Date").
(iii) Each Election must be made prior to the Tax
Date. The Committee may suspend or terminate the right to make
Elections at any time.
(iv) A Participant may also satisfy his or her total
tax liability related to the Award by delivering Shares owned by
the Participant. The value of the Shares delivered shall be
based on the fair market value of the Shares on the Tax Date.
Transferability. No Awards granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a
Participant except: (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so
provided in the Award Agreement or an amendment thereto; or (iv)
if permitted by the Committee and so provided in the Award
Agreement or an amendment thereto, Options and Limited Rights
granted in tandem therewith may be transferred or assigned (a) to
Immediate Family Members, (b) to a partnership in which Immediate
Family Members, or entities in which Immediate Family Members are
the owners, members or beneficiaries, as appropriate, are the
partners, (c) to a limited liability company in which Immediate
Family Members, or entities in which Immediate Family Members are
the owners, members or beneficiaries, as appropriate, are the
members, or (d) to a trust for the benefit of Immediate Family
Members; provided, however, that no more than a de minimus
beneficial interest in a partnership, limited liability company
or trust described in (b), (c) or (d) above may be owned by a
person who is not an Immediate Family Member or by an entity that
is not beneficially owned solely by Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and
natural or adopted children or grandchildren of the Participant
and their spouses. To the extent that an Incentive Stock Option
is permitted to be transferred during the lifetime of the
Participant, it shall be treated thereafter as a Nonqualified
Stock Option. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of Awards, or levy of
attachment or similar process upon Awards not specifically
permitted herein, shall be null and void and without effect. The
designation of a Designated Beneficiary shall not be a violation
of this Section 12(c).
Share Certificates. All certificates for Shares or
other securities delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements
of the SEC, any stock exchange upon which such Shares or other
securities are then listed, and any applicable federal or state
laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.
No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company from adopting or
continuing in effect other compensation arrangements, which may,
but need not, provide for the grant of options, stock
appreciation rights and other types of Awards provided for
hereunder (subject to stockholder approval of any such
arrangement if approval is required), and such arrangements may
be either generally applicable or applicable only in specific
cases.
No Right to Employment. The grant of an Award shall
not be construed as giving a Participant the right to be retained
in the employ of or as a consultant or adviser to the Company or
any Subsidiary or in the employ of or as a consultant or adviser
to any other entity providing services to the Company. The
Company or any Subsidiary or any such entity may at any time
dismiss a Participant from employment, or terminate any
arrangement pursuant to which the Participant provides services
to the Company or a Subsidiary, free from any liability or any
claim under the Plan, unless otherwise expressly provided in the
Plan or in any Award Agreement. No Eligible Individual or other
person shall have any claim to be granted any Award, and there is
no obligation for uniformity of treatment of Eligible
Individuals, Participants or holders or beneficiaries of Awards.
Governing Law. The validity, construction, and effect
of the Plan, any rules and regulations relating to the Plan and
any Award Agreement shall be determined in accordance with the
laws of the State of Delaware.
Severability. If any provision of the Plan or any
Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any Person or Award,
or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
No Trust or Fund Created. Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from the Company
pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional
Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
Deferral Permitted. Payment of cash or distribution of
any Shares to which a Participant is entitled under any Award
shall be made as provided in the Award Agreement. Payment may be
deferred at the option of the Participant if provided in the
Award Agreement.
Headings. Headings are given to the subsections of the
Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision
thereof.
XIII. SECTION
Term of the Plan. Subject to Section 11(a), the Plan shall
remain in effect until all Awards permitted to be granted under
the Plan have either been satisfied, expired or canceled under
the terms of the Plan and any restrictions imposed on Shares in
connection with their issuance under the Plan have lapsed.
